The nation's small businesses are the growth engine of the American economy, so it bodes well for 2017 that the people who run them haven't felt this cheerful in 12 years.
Optimism among the country's small businesses skyrocketed in December, as hopes for the economy increased following the 2016 presidential election.
The National Federation of Independent Business (NFIB) reported this week that its gauge of small business optimism spiked 7.4 points last month to 105.8, the highest since the end of 2004, from 98.4. The NFIB report was based on a survey of 619 small-business owners through Dec. 28. Most of the December improvement came from the "expectations" components of the index.
This sanguine data suggests that small-capitalization stocks are poised to break out in 2017, even as the broader markets seem set to pull back. The iShares Russell 2000 ETF (IWM) is the best way to play the likely small-cap surge. The ETF's share price has been rising over the past year, particularly the last two months. Shares rose nearly 1% in Tuesday trading.